BETHLEHEM // Water taps have run dry in this venerable West Bank city, fuelling public frustration and alarming Palestinian leaders.

An acute shortage has panicked Bethlehem hoteliers into building massively expensive storage tanks, lest their customers flee to water-abundant Israeli resorts. Freelance profiteers have carved out a thriving black-market trade in water affordable only to a wealthy few.

Meanwhile, Bethlehem's residents, who no longer have enough water to bathe regularly, are sporting scruffy hair and soiled clothing.

While nearby Israeli settlements lavish water on swimming pools and gardens, Mohammed Farraj, 16, barely scrounged up enough for a proper wash for his first day working at Bethlehem's Stars & Bucks Café this week.

Luckily for him, his boss, Youssef Juma, 27, was sympathetic. "We had a week without water here," Mr Juma said. "I didn't bathe."

For years, and especially since 2008, Bethlehem's residents have had to grapple with water shortages even though the city, revered by Christians as the birthplace of Jesus, forms the backbone of Palestinian tourism.

Palestinian Authority (PA) officials, while pointing to several years of drought and population growth, have put the blame squarely on Israel and its control over West Bank water resources. But increasingly, the PA has been the focus of public anger. "The Palestinian Authority says it's because Israel isn't giving them the water; it's always Israel this and Israel that! But if that's the case, then find a solution!" yelled Nabil Giacaman, 26, the owner of Christmas House, a shop that sells religious trinkets in downtown Bethlehem's Manger Square. Water riots have erupted in Bethlehem's refugee camps and angry crowds of people increasingly turn up for answers at local government offices.

With the water shortage and a financial crisis that Salam Fayyad, the PA prime minister, has said forced him to halve all public-sector salaries this month, municipal officials have said that they fear an explosive situation.

Victor Batarseh, Bethlehem's mayor, who is considering bringing the issue to the attention of diplomatic missions in Israel, said: "Imagine someone who sees people in the settlements playing in pools, while they can't even have a cup of water to drink. This is making people angry at us all."

Some hoteliers, struggling to accommodate Bethlehem's 30,000 tourist arrivals a month, have to pay extra for preferential water supplies. Issa Abu Aita, the owner of Bethlehem's Paradise Hotel, said: "I used to pay more to get it first, but then I said, no more, man. Kids need that water."

He subsequently built a US$300,000 (Dh1.1m), 1,000 cubic metre water storage facility to help offset the shortages. He called municipal officials 'corrupt' for trying to profit from the crisis.

Palestinian water officials have pointed to abundant statistics to show their inability to alter Israel's domination over 90 per cent of West Bank water resources, where, for example, 9,000 Jewish settlers in the Jordan Valley consume a third of all water that Israel allocates to the West Bank's 2.5 million Palestinians. Or the fact that while Israelis consume on average 280 litres of water a day each, Palestinians are left with 60 or less.

Shaddad Attili, the head of the Palestinian Water Authority, writing in the Jerusalem Post last month, has listed numerous examples of Israel's water stranglehold, such as denying permits for water exploration and destroying cisterns. He concluded that until "these policies are reversed, solutions for water will remain elusive".

Mr Attili yesterday said he was too busy to discuss the issue.

Some, however, were not so quick to cast blame entirely on Israel. Simon Alaraj, general manager of the Water Supply and Sewerage Authority, a semi-governmental agency that deals with issues relating to Bethlehem and neighbouring communities, said Israel is indeed partly responsible. The area obtains roughly two thirds of its water from Israel's national water company, Mekorot, but his statistics show this portion inexplicably falling recently.

So, Mr Alaraj said, coupled with a "population that is increasing and a decreasing amount of water, how can you expect us to distribute it evenly?" The area needs at least 20,000 cubic meters a day but has recently been trying to get by on as little as 7,000, he said.

But another problem, Mr Alaraj said, was a decrepit distribution network. He also criticised the PA itself for signing up to less-than-generous water agreements struck with Israel since the 1993 Oslo Peace Accords.

However, Amir Koren, Israel's Civil Administration spokesperson, part of the defence ministry that helps run West Bank affairs, said the PA had received from Israel the "same amount of water as they got for the whole year".

"Nothing has changed," he added.

Mr Koren also said Israel has been planning to announce in the coming days an increase of three-million cubic meters a year for the Palestinians. While potentially helpful in addressing badly affected areas, that would equal about about 3.28 litres a day per West Bank Palestinian.

Even so, the dispute has stirred the black market. Dozens of water lorries owned by private Palestinian entrepreneurs can be seen drawing water from Mekerot-controlled wells in West Bank areas that technically fall under Israel's authority. They can buy water for eight shekels a cubic metre or less and sell it for double or triple that amount in Bethlehem. That is an expensive option for the average West Bank Palestinian with an annual per capita income of US$3,000 (Dh11,000).

"Too much money!" is how one driver, Hamza Hermez, 30, described his business recently. He was pumping water from a Mekerot well next to the Palestinian village of Tekoa.

Murad Al Badan, 28, an employee of the Tekoa municipality who observed Mr Hermez, said his office splits revenues from the well with the Mekerot company.

"Our revenues are very high these days," he said. "All thanks to the water crisis."